The New Taiwan dollar fell for the first week since April as foreign funds sold stocks on concern prices have risen too much, considering the economy is in its worst recession on record. Bonds rose on Friday.
The currency has retreated almost 2 percent since reaching a seven-month high on June 1 as exchange data showed overseas investors sold more local shares than they bought on all but one of the past eight trading days. The benchmark TAIEX index of shares posted its biggest weekly loss since November.
“The things that people are buying are starting to look a little bit expensive,” said Richard Yetsenga, a global currency strategist with HSBC Holdings PLC in Hong Kong. “Equity markets have rallied a long way, and we think they’re primed for some disappointment.”
The NT dollar declined 0.6 percent in the past week to NT$32.800 at the 4pm close on Friday, according to Taipei Forex Inc. It touched NT$32.228 on June 1, the strongest level since October, as the TAIEX fell 1.8 percent, extending its weekly drop to 6 percent.
The NT dollar and the South Korean won are “still exposed to the cyclical risks we see,” Yetsenga said. The won has rallied 17 percent in the past three months.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the Asia’s 10 most-active currencies excluding the yen, fell on Friday after the Wall Street Journal reported the US Federal Reserve will resist pressure to increase bond purchases, avoiding more supply of the greenback.
The rupiah declined 1.6 percent this week to 10,095 per dollar in Jakarta, according to data compiled by Bloomberg. The peso fell 1.3 percent to 47.86, the most since the five days ended Feb. 20. South Korea’s won dropped 0.9 percent to 1,254.02, while the Indian rupee weakened 1 percent to 47.605.
Markets were closed on Friday in the Philippines for the Independence Day holiday.
Elsewhere, Malaysia’s ringgit fell 0.2 percent this week to 3.505 a dollar and Singapore’s dollar declined 0.4 percent to S$1.4521. China’s yuan was little changed at 6.8338, versus 6.8330 last Friday.
The US dollar advanced against the euro and the yen after Japanese Finance Minister Kaoru Yosano said his nation’s confidence in US debt is “unshakable” and that the currency’s global status is safe.
The dollar strengthened 0.8 percent to US$1.3997 per euro at 4:07pm in New York, from US$1.4108 on Thursday. The US currency rose 0.8 percent to ¥98.40, from ¥97.63. The euro was little changed at ¥137.73, from ¥137.74.
For the week, the dollar is down 0.3 percent versus the yen and 0.2 percent against the euro. The yen was little changed versus the euro this week.
The Canadian currency dropped 1.5 percent to C$1.1187 per US dollar, heading for a second weekly decline, after crude oil dropped as much as 2.6 percent to US$70.80 a barrel. The krone fell 0.3 percent to 6.3396 per US dollar.
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